Love Across State Lines

2007-11-06 by

Today TaxMama hears from Mary in Georgia who tells us, “I live and work in Georgia. My spouse lives and works in New York. We will file a federal return together. But do we file state returns together? Do I pay NY state tax on my GA income; and does he pay GA tax on his NY income? How does this work?”

Dear Mary,

That’s an excellent question. And I had a client with a similar situation – except he was in California and she was in Georgia.

First of all, you’re right. You do file a federal joint return.

Then, you have two choices, depending on how the taxes come out the best.

You can file a married filing separate return in GA and he can do the same in NY.

OR you file non-resident returns in both states. The non-resident return will be a joint return. It will exclude the income of the person who is residing in the other state. And it will only tax the income of the
local resident. (That’s how we did it.)

You’ll need to check if your states permit taxpayers to use a different filing status for state than you use on the IRS tax return.

Get someone to help you who understands how to prepare non-resident returns. They’re always a bit tricky and sometimes require a bit of tweaking to get the software to handle the computations properly.

Oh well, at least with the Internet and webcams, long-distance romances aren’t so distant any longer. Heck, you can even leave the camera on and have dinner together and spend time with each other (or ignoring each other) just like any couple sitting side by side.

And remember, you can find answers to all kinds of questions about multi-state taxes and other tax issues, free. Where? Where else? At TaxMama.com

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# | Posted in Tax Quips | Comments » (3)



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  1. Andy Says:
    November 06th, 2007 at 06:19 am

    States have different rules, so be careful. You may be filing MFS in the states in which the spouse is living. Or one spouse may be a resident of both states. You must check each states definition of "resident".

  2. Melanie Says:
    November 07th, 2007 at 09:19 am

    Okay, but what if your spouse lives and works overseas? In my case, I live in Virginia and my husband (yes, he is a US citizen) lives in Europe. We have a second home in Georgia. In fact, when he does come to the US, he goes there instead of VA, and so he could call Georgia his state of domicile. On top of it all, he may be able to take advantage of the foreign income exclusion. This has all gotten so complicated!

  3. Thomas Avery Blair, EA Says:
    November 07th, 2007 at 10:54 am

    The multi-state tax return can be a real mind-bender, especially when the state determines the percentage of out of state income as an "adjustment" but does not give full credit dollar for dollar. Proration of revenues can be a real pain also, say when two people have a joint savings account and/or a business and both have lived and worked in various states. Allocation and proration schedules are useful only if you know who to split revenues, expenses, deductions, etc. into the categories (usually based on the income source and the time spent in the particular locale). Don't cha just love multiple-state tax returns? Here in NE Florida I get to work with "snow bunnies" that come to Florida to avoid the harsh Northern climes in wintertime…some multi-state tax returns are quite easy to accomplish while others require a couple of hours of allocating and explaining on a letter or memorandum page attached to the various state returns. I personally detest California, New Jersey and New York non-resident and part-year resident returns in particular. But, if taxpayers didn't have tax complications and problems…they wouldn't need us!

    As ever,

    Thomas Avery Blair, EA

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